Morgan County Fair

Long-term unemployment leading to fewer in labor force in Colorado

Pam Sexton says she stays busy tutoring at the Lafayette Public Library after moving from Kansas City to improve her job prospects. (Andy Cross, The Denver Post)

About 250,000 Coloradans have gone missing from the labor force since the recession, casting a shadow on recent reports of falling unemployment.

Colorado's unemployment rate stood at 6.2 percent in December, down from a peak of 9.1 percent in the fall of 2010 and 7.5 percent in December 2012.

That drop, however, has been accompanied by a disturbing decline in the share of the state's population ages 16 and older who are working or actively looking for work. That share has fallen from 73.3 percent in 2006 to 67.2 percent, according to the U.S. Bureau of Labor Statistics.

"We have seen quite a drop in the labor-force participation rate, and a lot of people are concerned about this," said Alexandra Hall, the state's chief labor economist.

The number of adults participating in the labor force. (Severiano Galvan)

Hall notes that Colorado's participation rate is the lowest since September 1976. And it is down significantly from the 71.9 percent rate averaged from 1980 to 2006.

A population that is skewing older and retiring or taking disability explains about half the drop in the participation rate. The other half relates to a lack of job opportunities or a mismatch of openings with workers' skills and location, estimates the Congressional Budget Office in a white paper on the country's labor market released this month.

Colorado attracted a disproportionate share of baby boomers, those born between 1946 and 1964, during the 1970s, and this decade many of them will wind their way into retirement, said Cindy DeGroen, projections demographer at the Colorado Department of Local Affairs.

"We are moving a larger share of our population into that category," she said.

Baby boomers aren't going gently into the good night and are staying engaged in the workforce at a higher rate than previous decades, but age will eventually force the decision.

The more worrisome trend is those who are detaching from the world of work well short of retirement. If adults in the state had stayed engaged in the labor force at the same rate as before the recession, then the state's labor force of 2.74 million should be higher by about 250,000 workers, according to a Denver Post analysis.

Of course, more adults are reaching retirement age, even if the recession moved up the timing of that decision. Nevertheless, there are still about 125,000 people missing from the workforce. Counting them puts the unemployment rate back above 10 percent.

Anyone who simply quits looking for any reason — including frustration at a lack of opportunities — is no longer counted as part of the labor force. They cease to be officially unemployed, even though they would describe themselves as such.

The CBO estimates that about two of every three of those who depart the labor force for non-age-related reasons — say, to go to college — will return once employment prospects improve. But it also sounds a sour note in that a third are out for good — a loss of talent and spending power that will sap the nation's economic vitality.

Pam Sexton, right, has been unemployed for more than five years but works as a volunteer computer coach with people such as Janet Schnepf, left, at the Lafayette Public Library. (Andy Cross, The Denver Post)

Not far from joining that group are countless job hunters who are hanging on by their fingernails, suffering through horrifically long stretches of unemployment.

Lafayette resident Pam Sexton, who has been searching for a full-time permanent job since getting laid off in 2008, is among those who wrestle constantly with finding the strength to stay engaged.

More than 37 percent of the unemployed in Colorado have been out of work more than 26 weeks, or half a year, which is when state unemployment benefits expire.

That is nearly triple the 12.7 percent long-term unemployment rate averaged in the state from 1980 to 2006, according to the Economic Policy Institute.

"They keep talking about months, but there are years involved here," Sexton said of the long-term unemployment rate. "All I want is a stable job."

Sexton continues to stay in the ring despite repeated rejection, knowing that at 47 she is too young to retire. Hoping to improve her odds of finding permanent work, she moved from Overland Park, Kan., to Minnesota and then, after a return to Overland Park, to Colorado.

She has a master's in English and a technical background as a website designer. She volunteers at the Lafayette Public Library, tutoring others in computer skills.

She has worked in corporate intelligence, honed her skills as a researcher and writer, and even took additional courses in Web design for the health-care profession. Yet nothing.

"It is hard to think too much about it," she said. "I would never have imagined that after five years I would still be sending out résumés."

The longer people remain out of work, the less likely they are to find a job, creating a vicious downward spiral that eventually spits them out of the labor force, a spent shell.

"An exceptionally large number of people have been unemployed for long periods, and the stigma attached to their long-term unemployment, along with a possible erosion of their job skills, has made it difficult for them to find new work," the CBO warned.

The rate measures the share of adults over 16, excluding those in prison or the military, who are employed or actively looking for work. Participation rates in both the U.S. and Colorado were fairly stable from 1980 to 2006, but after the most recent recession, they fell to levels last seen in the 1970s. About half the decline is linked to the rising number of adults reaching retirement age. But a lack of employment opportunities is thought to be responsible for the other half. As more unemployed people stop looking for work, it can lower the unemployment rate, but for the wrong reason. It tends to result in lower living standards, more people receiving government support rather than paying taxes, and reduced demand for homes.

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